Brewer's initiative to lend money to small businesses

When he started brewing Samuel Adams beer out of a nearly abandoned brewery complex in Jamaica Plain, distributors told Boston Beer Co. founder Jim Koch they would not deliver his products to liquor stores and bars.

"We were small and fragile," he said. "Nobody wanted us."

So Koch did the only thing he could think to do: In addition to brewing beer, making sales, and minding the books, he spent Thursday and Friday afternoons slinging kegs off the back of a truck.

That experience gave Koch empathy for entrepreneurs like Carlene O'Garro, 26, of Mattapan.

Last year, O'Garro formed Delectable Desires, a pastry company that stocks cafes, coffee shops, and hotels. Every morning between 1 and 3, O'Garro finishes baking pastries she started assembling the previous afternoon at rented kitchen space in the same complex as Boston Beer's Jamaica Plain headquarters. By 5:30, the pastries have been loaded for deliveries O'Garro will make to her five wholesale clients.

"It's hectic," she said. "Before I quit my full-time job, I was working off of two to three hours of sleep in each 24-hour period."

At a reception tonight at Boston Beer's headquarters, Koch will begin offering more than a nostalgic memory to O'Garro and others like her. The company is unveiling "Samuel Adams: Brewing the American Dream," an initiative with Accion USA, a nonprofit that assists small-business owners, to offer small loans from a $250,000 donation by Boston Beer as well as business consulting services to New England entrepreneurs working in the food and beverage industry.

Koch has built a brand that is internationally known, but he is quick to note that Boston Beer accounts for just 0.8 percent of the US beer market. That means the company still has to act like a small business, and its employees must think like entrepreneurs.

He is also a supporter of small businesses and their ability to transform urban neighborhoods. Walking through the former Haffenreffer Brewery, Koch described the way it looked when the company made part of the complex - owned by the Jamaica Plain Neighborhood Development Corp. - its headquarters in 1984. A squatter lived in a building at one end of the brewery, while a chop shop that specialized in dismantling stolen Jaguars occupied a building at the other end. The building Boston Beer would initially occupy had trees growing out of its façade.

Today, 50 small companies occupy the space and employ 250 people - exceeding the number of people who worked at the brewery before it closed in the 1960s.

"Back then, you could get a house in this neighborhood for $35,000. Today, they're selling for $200,000 and $300,000," Koch said. "The brewery was an important part of that. The vision was to create small businesses that could provide entry-level jobs to people living in the neighborhood."

Livingston Parsons, a senior vice president with Boston-based Accion, said more than 80 percent of companies in Massachusetts are defined as small businesses, and 20 percent of all US workers are employed by a company that has fewer than 10 employees. Women and Latinos are becoming owners of small businesses at a particularly fast rate, Parsons said.

With interest rates between 12.5 and 16.5 percent, loans from the fund being set up with Boston Beer will serve as an alternative to credit cards, which many small-business owners use to finance purchases, and banks, which typically don't deal with new businesses that don't have a credit history and need loans between $2,000 and $20,000.

The partnership will also host seminars and establish a mentoring program with executives at Boston Beer and other companies in the industry.

"What we try to do is look beyond the credit score and the assets you have that can be seized if you default," Parsons said. "We want to look at who you are and what your idea is."

Last week, O'Garro was finalizing a loan of between $2,000 and $3,000, which would be the first offered by the program. She plans to use it to consolidate credit card debt she has accrued since opening Delectable Desires 15 months ago.

"It's going to make a huge difference," said O'Garro, who put off plans to go to law school to start her business.

Koch concedes most of the businesses funded through the program won't go on to garner the national name-brand recognition Boston Beer has attained. Indeed, the fund is specifically targeting catering companies, restaurants, and bakeries that "fly just below the radar."

"If you have a good idea, you don't need to be a huge company to provide lots of jobs," Koch said. "And I don't think you can define success by size. If five years from now we have 30 companies that each employ 10 people, that's awesome."